Anyone use Real Property Management of Greater Milwaukee?

Question

I've been with them for a year now and I'm less than impressed. I initially chose this management company for my 8 unit in Brown Deer because of all their positive Google reviews but I now strongly suspect that their reviews are fake. They are almost all from people who have only left one review and they are all overly positive.

When we started out things were fine. All 8 units were occupied when I purchased the property so they really didn't have to do to much work. In June one tenant moved out without notice. I said I wanted the unit painted and new carpet installed. It took them forever to get these two things done. It took them 4 weeks to get the unit painted and then my property manager suggested that I contact some carpet installers because I could probably get it done faster and for a better price. Two weeks later and Lowes had my new carpet installed that I completely scheduled and organized.

Two weeks ago I started really grilling my property manager on why the unit was still vacant and she said that there was one person who expressed some interest but never scheduled a showing. I got pissed so I created my own Facebook marketplace add for the unit and in the last 2 weeks I've had over 100 people (seriously not an exaggeration) contact me via FB messenger about the listing. I've been forwarding them to the leasing agent and telling them to schedule a showing.

Am I being unrealistic on what a property manager should be doing?!? I schedule the contractors. I market the unit. Isn't that what I'm paying them for. When I have one of my self managed units come open I have it turned and rented in 2 weeks MAX. Four months and counting for a basic vacancy is way to long in my opinion.

Marcus Auerbach · Answer

@Dave Klein getting contractors on a job quickly can be a challenge these days, but I still would expect paint and carpet to be completed in under 2 weeks. Meanwhile advertised, showings can be lined up and held back until the work is completed. We have properties in Brown Deer and fill a vcancy usually in 2 weeks. That would be ideal and in the real world things sometimes take longer, but what you describe would be more than I would tolerate. My recommendation for a quality PM would be Welcome Home Milwaukee, not sure what your rents are, but you may benefit from their flat fee - talk to @Matt Maurice

Matt Maurice · Answer

Construction is one of the largest challenges these days in running your rental portfolio.  We've been looking to hire maintenance folks for 18 months with very little to show for it.  One of the adverse effects of high employment & an economic boom.  The folks we could hire 3 years ago for $12/hour now scoff at our offers for $20.  We have a team of 6 on staff, not because it is all that profitable, but because it allows us to control the process.  Our team is usually first in and last out, meaning we handle demo & scope, bring in the subs to do the trade work, then we handle finish work.

A few questions prior to making any further assumptions...

• Does your manager provide a weekly leasing summary of some sort?  Meaning, are you being provided with the data of inquiries, showings, and applications?
• Have you reviewed the rental criteria they are using?  (Brown Deer tends to have a lot of applicants with credit concerns)
• Was there anything during the renovation process that could be construed as a delay on your part?  (approval timeline, cost restrictions or of the like)

Property managers at the end of the day are often asked to do a lot for not a ton in return.  That 10% coordination fee you may think is exorbitant to "make a phone call", but in actuality they are acting as GC, often extending financial risk, visiting the property for QA and playing babysitter to unreliable contractors.  I'm not playing the martyr here, but $500 on a $5k rehab doesn't go far to covering the real challenges of managing a project.

NOW.... all of that being said, it sounds like you have a problem.  Overworked, underpaid, at the end of the day what matters to you is that your property is being cared for, diligently managed and you don't have to question their performance on BP.  I suspect you'll be needing to make a change in management (which can be extremely daunting, I get it), but the timeline to renovate, and the (assumed) lack of feedback or answers to get the property leased are pretty big red flags unless there were legitimate delays on your part.

Matt Maurice · Answer

I ask the "have you caused delays" question purely as an internal exercise.  Sometimes investors tend to push very hard on price over anything else, which can lead to some unintended consequences.  In your case, it sounds as though this is definitely not the issue.

This time of year the inquiry to approved ratio skyrockets, here is an example of a property similar to yours:

•  724 inquiries / 217 showings / 18 applicants / 1 approved applicant

A quick point on the cost of property management, and I'll preface this by saying WHM likely is not the right fit for this property as we don't handle many MF buildings, particularly at that rent range.

The price of a common manager around town is 10% of rents.  At your $675 / month rent (per unit) it will be $67.50 / month (we will ignore other fees for now).

Where the commoditization of a property manager takes over, is that we tend to assume as investors all managers are created equal.  In your current situation, you have 4 months of vacancy or a $2,700 expense on your hand.  Now let's say a diligent manger could have turned the unit in half the time, causing just 2 months of vacancy (very achievable).  That would result in just a $1,350 expense, saving you $1,350.  If you divide that $1,350 out over 12-months, your current manager is actually costing you $180 / month for this ONE unit in fees plus lack of diligence.

The difference in a good and bad manager is not $40 / month, it's thousands of dollars to your investment (don't get me started on property preservation and related catastrophic events like tenant-related fires without coverage).  If you can't make the property cash flow with a good manager fee structure, I'd suggest considering a sale.  A fish thrown into boiling water will jump out immediately, a fish in water gradually heated up will ride out till the end.

Dave Klein · Answer

@Peter K.

Not really

Peter K. · Answer

@Dave Klein, want to sell?  :-)

Dave Klein · Answer

That's crazy to get that many inquiries to only get one qualified tenant. Hopefully that's not the norm. I have this property on a 15 year and it still cash flows nicely even with one vacant so I definitely won't be selling any time soon. I'm actually shopping for many more like this..... just in slightly nicer neighborhoods lol

Dave Klein · Answer

@Matt Maurice, thanks for the feedback. No delays on my end. An email would come over and each time I would have a reply back to them within an hour. When they needed funds in order to get the contractors in I transferred the funds the next day. So far in 4 months of the unit being open I have gotten one marketing summary report, last week. Heck up until 2 weeks ago they didn't even have any pictures of the inside of the unit.

I have reviewed the rental criteria they're using and it seems pretty straight forward. When I listed the ad on Facebook and got the inquiries I responded back to them all with the following message

"Thank you for your interest in the apartment, it is still available.We do have a couple pre qualifications for renting this unit which will save both of us some time.1)	Gross monthly income must be at least 2.5 times the monthly rental amount.2)	No evictions filed against you within the past 5 years - regardless of outcome.3)	In order to move in you would need the 1st months rent and the security deposit ($1350 total).If you meet these qualifications then we’d love to have you apply. If you would like to schedule a viewing, please contact our leasing agent at 262-XXXX his name is XXXXXX.  The Property ID is  #XXXXXX. You will probably have to leave a voice mail so please include that in your message so he knows what unit you are calling about.The unit is currently empty so it is very easy to show and a qualified tenant can move in quickly."

I get what you mean about the credit issues in that area since it's a C class neighborhood. I'm hoping my message weeds out some of the non qualifiers. With over 100 inquiries you would think that at least 20 would qualify though.

Dave Klein · Answer

Thanks for the suggestion @Marcus Auerbach. I checked out their website and I definitely do agree with their pricing model in that it takes just as much effort to manage a $500 per month unit as it does a $1500 a month one so why should a management company get 3X the fees. Unfortunately since my units rent for $675 their flat fee would put my management fee at almost 20% so I don't think they will work out for this property.

Appreciate the feedback though. Who knows, maybe me having to do a lot of the work is actually a good thing. If I can figure out how to do it all from a distance maybe then I just self manage long distance (100miles) and just hire a local leasing agent once I get enough units :)

Anyone use Real Property Management of Greater Milwaukee?

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